Portugal to vote in general elections

The ballot is forecast to unseat the government and bring the main opposition party to power.

05 Jun 2011 00:21 GMT

IMF predicts a recession in Portugal as the economy contracts 4 per cent over the next two years [AFP]

Portugal goes to the polls on Sunday in an early general election to decide who will implement a 78 billion euro bailout deal, with the centre-right opposition conservatives are expected to oust caretaker Prime Minister Jose Socrates' Socialists.

Final opinion polls gave the Social Democrats (PSD) around 37 per cent of the vote against 31 per cent for Prime Minister Jose Socrates' Socialists, in power since 2005.

This would leave the PSD short of an absolute majority in the 230-seat parliament, but the party could govern in coalition with the third-placed conservative CDS-PP, as it has done in the past.

Saturday had been declared a "day of reflection", and campaigning and the publication of polls were banned.

Portugal's three main parties have agreed to the conditions attached to a bailout deal struck in May with the International Monetary Fund and the European Union.

These include deep cuts in public spending on health, education, pensions and jobless benefits at a time when the unemployment rate hit a record 12.6 per cent in April -- one of the highest levels in the eurozone.

Different approaches

But the parties disagree on the best way to achieve the required spending cuts as well as how to revive the economy, which is expected to shrink by about two per cent this year and the next.

Social Democrats leader Passos Coelho, 46, has repeatedly promised to "go beyond" the demands for reforms and privatisations, and has accused Socrates of steering the country to the brink of bankruptcy.

Socrates, 53, has accused the PSD of having a "radical right-wing agenda" to curb public services like free schooling and health care.

The early election was triggered by Socrates' resignation at the end of March after the opposition in parliament rejected his minority government's fourth austerity package in under a year.

Two weeks later, Portugal became the third eurozone nation, after Greece and Ireland last year, to request an international bailout because of its inability to meet refinancing obligations.

Voters’ doubts

Socrates argues he did everything to avoid a bailout. He blames the PSD, which had backed previous fiscal tightening, for provoking a political crisis to topple the government "out of a greed for power".

With the loan package expected to handcuff whoever is elected, many voters question the point of casting their ballot.

Portuguese President Anibal Cavaco Silva has rejected this argument, saying in a televised address to the nation late on Saturday that the next government's role will not be limited to implementing the bailout agreement.

"The new government will have much more to decide and do in order to guarantee social justice, economic growth and the fight against unemployment," the former PSD prime minister said as he appealed for a strong turnout.

"In democracy all elections are important. But the serious situation the country finds itself in makes tomorrow's elections especially important."